Correlation Between Sally Beauty and Container Store
Can any of the company-specific risk be diversified away by investing in both Sally Beauty and Container Store at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sally Beauty and Container Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sally Beauty Holdings and Container Store Group, you can compare the effects of market volatilities on Sally Beauty and Container Store and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sally Beauty with a short position of Container Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sally Beauty and Container Store.
Diversification Opportunities for Sally Beauty and Container Store
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sally and Container is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sally Beauty Holdings and Container Store Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Container Store Group and Sally Beauty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sally Beauty Holdings are associated (or correlated) with Container Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Container Store Group has no effect on the direction of Sally Beauty i.e., Sally Beauty and Container Store go up and down completely randomly.
Pair Corralation between Sally Beauty and Container Store
Considering the 90-day investment horizon Sally Beauty Holdings is expected to generate 0.23 times more return on investment than Container Store. However, Sally Beauty Holdings is 4.29 times less risky than Container Store. It trades about 0.06 of its potential returns per unit of risk. Container Store Group is currently generating about 0.0 per unit of risk. If you would invest 1,165 in Sally Beauty Holdings on August 28, 2024 and sell it today you would earn a total of 244.00 from holding Sally Beauty Holdings or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sally Beauty Holdings vs. Container Store Group
Performance |
| Timeline |
| Sally Beauty Holdings |
| Container Store Group |
Sally Beauty and Container Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sally Beauty and Container Store
The main advantage of trading using opposite Sally Beauty and Container Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sally Beauty position performs unexpectedly, Container Store can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Container Store will offset losses from the drop in Container Store's long position.| Sally Beauty vs. Oriental Culture Holding | Sally Beauty vs. Hour Loop | Sally Beauty vs. Qurate Retail Series | Sally Beauty vs. Emerge Commerce |
| Container Store vs. Tillys Inc | Container Store vs. Big 5 Sporting | Container Store vs. Sportsmans | Container Store vs. Noodles Company |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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